Arvind M. Kariya Vs ACIT (ITAT Mumbai)
The ITAT Mumbai reheard the assessee’s appeal pursuant to the Bombay High Court’s order directing recall of the Tribunal’s earlier order dated 30.01.2013. The High Court held that the Tribunal’s earlier order dated 20.10.2010 passed in the regular assessment proceedings deserved consideration while deciding the appeal arising from search proceedings under Section 153A for the same assessment year. Accordingly, the Tribunal recalled its earlier order and proceeded to hear the appeal afresh.
The assessee, an individual belonging to the Kariya Group, had originally filed a return for Assessment Year 2004-05. In the regular assessment under Section 143(3), an addition of ₹45,55,979 under Section 68 relating to sale proceeds of shares of M/s Shalimar Agro Product was deleted by the CIT(A). In the Revenue’s appeal, the Tribunal, by order dated 20.10.2010, restored the issue to the Assessing Officer for verification of the actual date of purchase of the shares to determine whether the gains were short-term or long-term capital gains.
Subsequently, a search under Section 132 was conducted in the Kariya Group on 18.07.2007, during which documents relating to the purchase and sale of shares of M/s Shalimar Agro Products Ltd. and M/s G-Tech Info Training Ltd. were found. The assessee’s statement was recorded under Section 132(4). In the assessment completed under Sections 143(3) read with 153A, the Assessing Officer treated the long-term capital gains of ₹55,54,250 on sale of the shares as income arising from artificial long-term capital gains and also added ₹2,77,712, being 5% of the sale consideration, as unexplained expenditure under Section 69C towards alleged commission or service charges. The CIT(A) confirmed both additions.
